I was in the 6th grade when I first laid eyes on her. She was a 1989 BMW 635i Coupe that did donuts in the school’s parking lot after class thanks to an obnoxious, rich 11th-grader who got the car as a birthday present. I was immediately smitten and promised myself one day I’d be able to buy such a car too.

The new 6 series BMW came out in 2005 and all the memories came rushing back. What cost only $35,000 then now cost $75,000 thanks to inflation and an infinite amount of new features. I don’t know about you, but $75,000 is a big chunk of change and is way beyond my 1/10th rule for car-buying I say everyone must follow.

I figured instead of spending $75,000, why not go back in time and actually buy that 1989 635i Coupe! My brilliant idea led me to Craigslist where I found my true dream car listed in “fantastic condition with only 160,000 miles”! That’s only 8,000 miles a year I rationalized, and off I went to see the seller 45 minutes away.

The gold 635i BMW was in great condition and the seller was only asking $3,800. After a test drive and over one hour of negotiating, I got him down to just $2,500. What a bargain, I thought, knowing that even if the car blew up the next day, I’d only be down $2,500. I gleefully drove back home in my dream mobile that I had waited for almost 20 years. Of course, as soon as I got home all the trouble began.

No room

Having bought and sold eight cars in the past 10 years, I fancy myself as a car aficionado or addict. Unfortunately, since I just had to have this new ride, I violated one of my basic rules: sell my existing vehicle before buying a new one. Parking is an absolute nightmare in San Francisco and, unfortunately, I’ve only got one-car parking. What a donkey.

So here I am, a guy who takes the bus to work with two cars and not enough space. What a pain in the rump as I had to move my car every several hours before 6 p.m. or risk getting a ticket. I ended up blocking my driveway most of the time instead, which immediately made my other car useless. At least I knew I wouldn’t be calling the parking police on myself!

After a couple months, I eventually sold my other car in order to park my baby, Sherman, in the driveway.

Unforeseen problems

I know that a 20-plus-year-old car will undoubtedly have problems, but sheer lust drove this purchase and I chose not to get an inspection. Bad move as my steering gearbox had a crack, which resulted in a massive amount of steering fluid leakage every time I stopped the car. Cost to fix? $1,200-1,500, which I didn’t end up fixing. I just bought 20 gallons of steering fluid for $30 bucks! Yeah, baby, yeah!

What’s worse than a leaky steering box? A sticky accelerator. I discovered on a routine drive around the city that my accelerator would get stuck on “lead-foot mode” every so often and I had to ram on my brakes and shut the engine off to avoid crashing into the car ahead of me. It was one of the scariest feelings ever and something that really made me question whether I’d ever want to own a classic car again.

This was a problem I had to fix, so I spent $400 changing out the electronics that control the sensors to the accelerator. I didn’t want to end my life running a red light and getting T-boned because I couldn’t stop in time. OK, all was good again — until a third major problem arose.

Soon after I fixed the accelerator, all the electronics would intermittently shut down, causing me to lose all lights and power steering. Of course a cop was behind me during one episode and I got a fix-it ticket. The ticket was only $15 bucks if I fixed the problem within 16 days. It was just a big hassle. Sweet, another $400 out the window.

The final unforeseen defect was a low idle, which caused it to stall. My dream mobile would just die at a red light and I’d have to crank the ignition multiple times before he would start again. How stressful and embarrassing. Back to the auto mechanic I went, who proceeded to charge me another $300 for a “classic car tune-up and idle adjustment.”

If only I had been thinking straight

I let my emotions get the best of me. I knew there would be problems with the car, but I didn’t care. I had successfully walked away with my dream car for only $2,500 and that’s all that mattered at the time. I ended up spending $1,200 more to make the car operable, and it still had a $1,200-plus steering gearbox problem which I refused to fix. Who needs steering anyway? All in all, I have probably seen the mechanic six times and spent more than 15 hours to maintain the car in my 1.5 years of ownership. In the end, it wasn’t worth the headache at all, no matter how sexy the car looked.

2) spend $100 and a couple hours having the car checked out by an auto mechanic

3) wait a couple days before negotiating

4) check the online forums to understand all the major problems with the particular model and ask the seller about them, and

5) never buy a classic car again, unless it’s in pristine condition!

I ended up selling the car to another emotional enthusiast for $2,200. I told him about my problems and all the fixes I had made except for the steering box, which he saw on his own. I learned that I don’t have the time or the money to spend maintaining a car. A car should serve me, not the other way around. From now on, I will never let my car nostalgia get the best of me. Don’t let it get the best of you either!

Readers, have you ever let your emotions get the best of you when buying a car, a house, or anything that should have taken more thought before purchase? Is buying nostalgia not one of the most rewarding activities? How do you control your urges to splurge? Do you think Americans have a spending problem or an earning problem?

It totally agree with bringing a friend as the voice of reason. I find it helpful to talk through the options with someone!

I remember some of the backlash on that 1/10 rule article, so I thought I’d throw a couple of other measures out there. I took at total cost of ownership over the life of the vehicle (about 10-12 years) and
Gail Vaz Oxlade’s 15% rule. That’s the upper limit of how much of your net income you should spend on transportation. (Including gas, car, insurance, maintenance, etc.)

IMHO, there are always going to be opportunity costs to owning a car — but you can say the same thing about taking vacations, owning a home (when rent is cheaper), buying new clothes, going to the movies, etc. I think we need to be honest with ourselves about how much of a car purchase is a need versus a want and budget accordingly.

So…. if you’d fixed everything as soon as possible, you would have been driving around in your dream car for about $5000? Doesn’t sound so bad to me. I wouldn’t do it because I don’t like hassle – my dream car is the one that magically gets its own oil changed and tires rotated – but if you’re not relying on the car for daily transportation, a few days in the shop is not a big deal.

I agree with Kate. The repairs were not that brutal and maybe he would have ended up with a nice collectible car. But to get into a car hobby you need to learn how to be patient and fix things on your own– otherwise you’ll be bleeding money.

Looking at it from hindsight, he should have put the bimmer in the driveway, take time to fix it right, and once it was up and running reliably sell the other car.

I have a friend who buys old cars and motorcycles, fixes them, drives them around, and sells them for a profit, so he drives for free. Of course he enjoys every aspect of the process, from scouring Craigslist to making deals and trades to getting under the vehicle and acquiring a vast collection of grease stains on his attire. It takes time and dedication and a love of machines to do this though.

Definitely agree with Kate and El Nerdo here. It’s all about knowing what you want the car (or any material possession) for and valuing it based on that. Sounds like Sam didn’t know what he wanted this car for (other than to scratch a childhood itch) and was disappointed with the unexpected side effects of his purchase.

Then again, maybe I’m biased as a proud new owner of a 41-year-old car that will happily entertain my husband for years fixing it up and playing around with it. We know it’s consumer spending, and will never count it as an asset no matter how much money goes into it, but it’ll sure be a heck of a lot of fun along the way.

A lot of it comes down to what you buy: I have a used Lexus IS350 that’s been more reliable than my old Honda Civic and has needed less maintenance as well (it’s also currently cheaper to insure than my girlfriend’s new Civic.) The only maintenance aspect that is pricier than the Honda is the tires, but then again it would have been almost as much had I been putting sport tires on the Civic as well.

Am I the only one that cringed at the work around Maintenance done for this vehicle? Frugal is one thing. Cheap is another.I’m envisioning the mess of fluid stains at the various parking spots you found….
What Growing up our cars were usually on the brink of utter failure do to neglect and too many bandaid style ‘fixes’. As an adult I swore I’d never let that happen and have a fund for fixing my car when the inevitable break downs occur.
I hadn’t heard of the 1/10 rule for care purchasing..that’s a good one I think. I would say make sure you’ve saved more than 1/10 of your gross income before going shopping so that if something goes wrong after purchase you have some money to make smart repair decisions.
I purchased a new car way back in the day. I learned quickly that payments do suck, so I doubled down and paid it off early. I planned on driving it till it died and was looking forward to decades long relationship….till I totaled it. So I got a used car, and paid it off early and with the insurance money from the wrecked car.
One thing I would caution for people who use their car to commute or just drive daily (which I have learned the hard way): If you buy used, do some research and find out how well the car ages, how well it keeps road noise muffled, and any other comfort features that might make your driving experience better. It might be worth paying a little more than 1/10 up front if you drive a lot and plan on keeping the car for a long time.

When I was young, I had a slew of cars that I bought for between $1,500-2,500. They were disasters! Some of the stories you tell are all too familiar. The worst was a car that was fine on city streets and fine on the freeway, but would die quite often when moving from freeways to city streets. It was pretty embarrassing, and I’d get honked at a lot when my car couldn’t move. I did hit the jackpot once with a $3,500 car that lasted me SEVEN years with no major repairs ever needed until it was old enough with high enough miles that I didn’t think that repairing it would be worth it.

I did the same thing when I was younger- cranked through beater car after beater car, some of them (fine, most of them) killed by my own steep learning curve. Into each car I sank enough repair money to equal or exceed what I’d paid for the car in the first place. It may not have been efficient, but dang was it an effective crash course in Cars for Dummies.

I am in the same boat. Almost bought a ’93 860 (V-12 BABY!!!!) for a song. I love those cars, best looking BMW’s (IMO) ever produced. My rule when buying ‘classic’ anything, cars, motorcycles, etc., is that I am willing and able to do ALL maintenance except maybe changing and balancing the tires (YouTube is your friend here). So far I have only bought old motorcycles, haven’t had the time for the 860 yet, maybe in a few years.

From what I understand, yes, that’s his rule, and he explains it in an article in his blog. Maybe living in San Francisco you can do that (or you could rent a Zipcar instead of buying), but for someone who depends on a vehicle to do business or get to work on time it could be financial suicide.

Imagine the realtor calling to apologize they can’t show you the house today because their car died on a red light. Or the rural teacher who gets stranded by the side of road too many times a week. Or worse, the surgeon not showing up for your surgery because they’re waiting for the tow truck on the highway.

Having said that– it’s probably a good mental workout to start thinking how low can you go to get a reliable car. You can get a solid reliable car for less than you think, and with proper maintenance it can last a very long time. The problem is that people think new first and then get stuck with payments of $500+/mo. for eternity. I know someone who just got suckered into doing that by a car salesman– and they weren’t even planning to buy a car!

Agreed. I like going the 2-3 year old used car route after scouring Consumer Reports and Bluebook to determine what car will be worth the most *to me* for the amount I’m willing to pay for transportation.

Yeah, depending on your circumstances, it could be penny wise, pound foolish to buy an unreliable car that you have to regularly replace or repair. And no doubt about it, to follow Sam’s rule, for most Americans the car would end up being unreliable. His rule assumes that a car is something that you don’t rely on for everyday work transportation. I don’t know that much about Sam, but I would guess he lives in an urban setting with good public transportation.

I’m perfectly happy with having paid cash for a car that follows an alternate 1/5 rule. It was a 2012 Ford with only 20,000 miles on it when we bought it two months ago, and barring an accident, we won’t have to worry about replacing it for probably 10+ years. And this was a “splurge” for us.

In general (and this is an overall criticism of the GRS/MMM/personal finance crowd), they don’t seem to grasp the types of environments in which lots of Americans live and how that affects their car choice and usage. For instance, my husband works 30 miles from where we live. Yeah, it sucks, but it would be foolish of him to try to find a closer job, mainly because he has been in this job for 15+ years and likely makes more than he could find elsewhere. Most importantly, he is happy there. The other option is for us to move closer, but we live in an area with a walkability score of over 90. If we moved to his work area this number would go down to 18, i.e. we would live in the car. All the communities in between his work and where we live have much more expensive houses to the tune of $300,000 or more.

Our compromise? Buy a reliable, fuel efficient car, which violates an arbitrary 1/10 rule, and most importantly, work from home two days a week and the other days carpool with a co-worker, something which he has been doing for over a decade.

This is an interesting article. I think most people buy cars more for ‘status’, rather than for utility, so I think there are many emotional buyers out there. I also think people buy real estate with too much emotion. As a real estate investor myself, I always suggest that people buy a reasonable property, in a walkable/bikable location that they could easily sell or rent out without losing money. It is best to keep the emotions out of the purchase and focus on the numbers.

Quite a few years ago I read an interesting study about cars. It isn’t the actual cost of a car as much as the age of a car that makes up the expense of owning. Newer cars depreciate and older ones need more repair.

The least expensive in the end is to buy a three year old car and drive for three to five years. After they are eight years old your overall cost will go up on average.

With one exception due to a special circumstance that is what I have done now for years, and a planned buy discourages impulse, emotional buying as well.

I was even dumber. I bought my current car, a Range Rover Sport brand new. And I rolled some negative equity in. I fell in love with it because a friend had it. I barely test drove it, and I didn’t drive any other cars for comparison. A month in, I realized1) you feel every road bump, the rear seats don’t fold flat, there is hardly any leg room in the back, it is terrible for fitting car or booster seats.. On and on. I will be paying this piece of crap off this month and trading it in for a functional used car- thank you very much!

Agree about having a mechanic check out the prospective purchase. I know someone who skipped that step because his finances were tight when he needed to replace his car.

He bought an older car that a school automotive class had fixed up, including what he was told was a rebuilt transmission. Very soon after and twice the purchase price later, he found out that the class had installed the wrong type of transmission in the car.

I had a 13 year old 2 door Accord with over 300,000 miles on it, bought new by me. I loved this car. Then I got pregnant. I was convinced I could continue driving it. But, I shared this information with my friend, who was a mom of two and a carpool partner who rode in my backseat. She told me that there was no way to fit car a seat back there and getting the baby in and out would be difficult. Besides, my old car didn’t have the latch system and I had been told how hard it is to install car seats. On the first day I actually tried to take my baby in and out of my car, I got the infant car seat stuck (with my baby in it) between the door frame and the passenger seat. I went out the next day and bought a cute little station wagon. I really thought I should get a minivan, but I felt stupid for wanting one when I only had one kid and fertility is not a guarantee. Eight months later I was pregnant again. I wish I had gotten a smaller car seat (being a new parent I had no idea how they can vary in size) and still drove the Accord until right before baby #2 and then have bought a minivan. I have since seen a handful of people with babies still using the exact same make and model of Accord with car seats. I know it’s only a matter of time before the family outgrows the small station wagon.

Heh, I know all about it, down the the emblem on the hood. I wasn’t quite able to get an E39 M5 like I went out for, but I got the next best thing, with mixed results. Definitely not my best moment, that much is certain.

We purposely buy old cars, not because we are cheap or nostalgic, but because they are easier for us to fix ourselves. I don’t need specialized diagnostic equipment to fix my 1992 sedan, with its hand-crank windows and locks with actual keys. All I see when I look at a new car is more computerized crap to break.

If you are unwilling or unable to work on a car yourself, then of course this philosophy is useless.

We told our 16 yr. old daughter that she will never be happier in a car than she is now driving her used Saturn Vue we paid $3000 for. No need to spend lots on a car, which is just a tool, after all. Our car is a Chevy Impala that we bought for $6000 from people we know. They buy salvage cars and fix them up, so it was cheaper than it would have been otherwise.

I agree people buy new cars mostly because it is a status symbol. A true car lover always goes with a used car and likes to customize it as per his own requirements. For me its just fun to rip apart an old car and check out its insides.

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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